All posts tagged container shipping

Optimism in the shipping industry after a good 2010 business year has been replaced by nail-biting and bleak short-term outlooks in 2011, as bunker fuel prices have sky-rocketed and freight rates dipped some 30% to an unsustainable low level.

The group’s CEO said no freight rate recovery expectations are included in the outlook for the remainder of the year.

Maersk maintains that the needed shipping volumes growth is there to support higher rates, but it fails to trickle through to prices, the CEO said. Too much new capacity is brought to the market in the second half of the year. The competition-driven price pressure is mounting, and especially the key Europe-Asia and U.S.-Asia routes are burdened, as shippers fight to secure volumes to fill their expensive new tonnage.

“We haven’t seen further rate declines in the past few months, but the rates are at a level where the industry can’t make any money,” CEO Nils Smedegaard Andersen said.

Or, in other words: The situation isn’t getting any worse…but then again, it hardly can.